Martin Gruenberg, president of the United States Federal Deposit Insurance Corporation, said the FDIC plans to return approximately $4 billion in deposits connected to Signature Bank’s digital asset banking business in early April.
At a March 29 hearing of the US House Committee on Financial Services exploring federal regulators’ responses to recent bank failures, Gruenberg saying deposits that were not included in a New York Community Bancorp subsidiary’s offer for Signature would be returned “early next week,” roughly $4 billion tied to digital assets. Reports suggested that the FDIC would close all cryptocurrency-related accounts that are not part of the NYCB settlement by April 5 if depositors do not move their funds.
According to Gruenberg, Signature’s payments platform Signet, which, along with digital asset depositories, was not included in the NYCB’s offering, was “in the process of being marketed now” to potential buyers. The FDIC, along with New York financial regulators, shut down the crypto bank on March 12, citing risks to the US economy after the failure of Silicon Valley Bank and Silvergate Bank.
Nellie Liang, the US Treasury Department’s undersecretary for internal finance, said she did not believe cryptocurrencies “played a direct role” in the failure of Signature or Silicon Valley Bank:
“I know Signature had activities related to digital assets, but I don’t think that’s the main one. [cause].”
The March 29 hearing marked the second time that Liang, Gruenberg and Fed Vice Chairman of Supervision Michael Barr addressed lawmakers following the collapse of three major banks in the United States. The Senate Banking Committee held a hearing on March 28, in which Gruenberg said that Silvergate Bank had failed to adequately manage the risks that led to its failure.
Related: US Explores Ways to Secure Nation’s $18 Trillion in Bank Deposits: Report
Although some lawmakers and regulators have apparently pointed to the banks’ ties to digital asset firms, many have criticized the association as lacking merit. Former House member and Signature board member Barney Frank reportedly said officials wanted to send a “very strong anti-crypto message,” claiming the bank had no solvency issues in the time of its closure.
Magazine: Unstable currencies: decouplings, bank runs and other risks loom
